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SearchCIO.com recently checked in with Jack Anderson, a former innovation specialist at Intel Corp. and current program manager for Global Innovation Services at Chevron Corp., to find out how the oil giant fosters innovation and develops processes that create an "innovation cycle." The San Ramon, Calif.-based energy giant is experimenting with ways to make innovation a repeatable result. One of the first steps was building a 2,000-square-foot "innovation zone" where select members of Chevron's 62,000-strong workforce are literally walked through spaces that are designed to get creative juices flowing. Here's a condensed version of our interview with Anderson:

How do you define innovation at Chevron?

Jack Anderson

Jack Anderson: We categorize innovation in three different ways: First, there is radical innovation. Radical innovation is a game changer. In product terms, it is a radical new product -- Post-its for 3M was a radical diversion, for example. The problem is that of the hundreds, maybe millions, of ideas that surface in a company, how many make it to becoming an actual product? It is minimal.f

Second, we look for reapplied innovation. Reapplied is where an idea or a solution to a problem in one area actually might be radical when you bring it into a new area. You're not reinventing the wheel, but you're adapting something to a new area or new product. There is some great stuff out in the industry where companies like Procter & Gamble set targets for the number of reapplied ideas that they generate. Reapplied might be bringing a cost-saving initiative you saw over in finance and applying it in the IT operations.

And then there is incremental. This is the hardest one for people to understand. Incremental changes happen all over the place and innovations in this area are plentiful, but they are the least recognized. So, by having people understand that if you take your idea and add a couple things to it and somebody else takes your idea and improves it, that is actually innovative thinking.

All three of them add up to a pipeline that gets you more of the radical [innovation] down the road.

Anderson: One of my first projects coming into Chevron was to build what we call an innovation zone. It is an experiment on how we can use physical space to help with creative thinking. We built a space that is about 2,000 square feet where I can bring people together. We have six purposes for this thing:

Failing forward is about the attitude that as long as you learn and you grow and you share the body of knowledge and get better, it is not a failure at all.
Jack Andersonprogram manager, Global Innovation Services, Chevron Corp.

Collaborative thinking;

Training on innovation;

Experiments;

Business engagement;

Creative networking; and

Coaching and mentoring.

It has been amazing to see the response. We use techniques from IDEO, the creative design company, on how to reconfigure rooms and walk people through breakthrough thinking.

What we try to do is give people techniques they can utilize after they walk away from this space.

Is there any process to innovation, or is it always unpredictable?

Anderson: We use what I call an innovation cycle. It's a standard way of walking a group through innovative thinking in a quick way. This innovation cycle is out there in the public domain -- but I always point people to the IDEO books on group creative think.

The first step is to really understand what you are working on. The next step is to observe: Go out and look at how the problem is affecting people and how they respond to it -- what the real problem is, not just what you think it might be. The next step is the one everyone thinks when you say innovation: to ideate. Here is where people brainstorm and creatively think. The next step is to refine the ideas. Then you prototype. After you're done with that, you can plug into your production cycle.

What is the biggest hurdle in getting people to innovate? Doesn't everyone see this as a good thing?

Anderson: You just hit on the problem that I see CIOs struggle with. If I go ask a leader, "Do you think it is valuable to have innovation in your organization?" who would say no? They are obviously going to say, "Yes, we want to have that." But they don't know how [to] predict this area or measure it. What kind of return on investment might you get if you invest in this area?

Anderson: In the CIO space there is a really interesting trend I am seeing. You see CIOs emerging from the functional ranks, but the ones that tend to be catalysts tend to come from maybe the business ranks. Our current CIO of our technology company, Louie Ehrlich, comes from a different side. He is not a classic IT guy and wants to push us in a different direction. I am going to be blunt: I see a lot of leaders coming into the CIO roles -- the kind of guys who have had it with IT and want to make it better because they have been at the receiving end of information technology for a long time. They saw problems and bureaucracy and, very frankly, arrogance and a lack of listening.

What about when innovations fail?

Anderson: I go back to Intel because I was there longer. A group at Intel applied a "failing forward" award. "Failing forward" means working on some amazing project that doesn't end up the way you thought it would.

Failing forward is about the attitude that as long as you learn and you grow and you share the body of knowledge and get better, it is not a failure at all. Merck did something interesting in this area: They set up everything they do in their innovation space to be an experiment, with a hypothesis and the whole frame of an experiment. Of course, being a pharmaceutical company and a scientific company, that approach is really brilliant -- the initiatives that work well in innovation are tailored to make them fit with the company's value structure. But it is funny, the word failure is not accepted at Chevron. That is a bad thing. At Chevron, everyone wants to get an A+. We have mottos: "Do it right, or don't do it all." Merck has a metric to show how even failures add to the body of knowledge.

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